Don't just jump into the stock market. You will need to understand what those investment terminologies that are used so frequently meant. This matters as it could mean either you make a profit or a loss. Without understanding investment terms is only to invite more losses. I've found an article that discusses briefly the meaning of investment terminologies. Hope it is of use to you.
Basic Stock Investment Terms By Candis Reade Platinum Quality Author
Basic Investment Terms are words you should understand before you attempt to buy into any investment. Starting at the beginning, what is an investment? Here are some basic investment terms to understand before you invest in the stock market:
Investment - This occurs when you contribute either money, time, knowledge, or skills to a company, an idea, a building, or a group in exchange for hope of getting more money back later, as value in the investment increases.
Risk - This is the fact that you may not reap a benefit or increased value (money) from your investment.
Appreciation - The increase in value of money or property invested in.
Depreciation - The decrease in value of money or property invested in. For example, usually as equipment ages, it is worth less, until such a time as it is deemed to be worthless or have zero value.
Asset - An item of value, such as cash on hand or equipment.
Liability - An item of debt, such as a credit card balance, or lien on equipment.
Stock Market - An organized venue for exchange of investments, such as NYSE (New York Stock Exchange) or ASE (American Stock Exchange).
Broker - A person who conducts transactions of investments, as in stock broker who transacts orders of buy and sell stock in companies and corporations. (Also Trader)
Discount Brokerage - A company who conducts investment transactions at reduced commission. They usually offer less service.
Buy - The act of purchasing.
Sell - The act of selling.
Trade - The acts of buying and selling, especially stocks.
Stockholder - A person who owns a share or shares of stock in a company or corporation.
Stock - A share of stock is a segment of ownership in the company or corporation. Can be common or preferred stock. Preferred gets paid first, and has set dividend rates.
Bond - Investment in a debt that pays set interest and has an end date.
Mutual Fund - A fund of stocks operated by a company that buys and sells shares in their pool of stocks.
CD - Bank Certificate of Deposit, shows ownership of investment of cash in a bank or credit union.
IRA - Individual Retirement Account. Similar to a savings account, tax on interest may be delayed until withdrawals, which are restricted until holder reaches a certain age limit.
Dividend - A distribution of profit to shareholders, per share.
Earnings - Profits or losses per share.
Interest - Payment for using your money investment.
Growth Stock - Stock in a company that grows, and is not subject to economical ups and downs.
Income Stock - Stocks that generally have higher than average dividends paid. Good when you need to draw off income over time on a regular basis.
These are some basic investment terms, things you should understand before attempting any stock market investments.
For additional information, please consult a licensed stock broker or firm to ensure your best return on your investment.
Parting words from Tompreneuer: The above article only covers the basic of stock investment terminologies. For more trading and investment guidance tips, visit Quick and Easy Guide On Investment.
About the Article Author
Candis Reade is an accomplished niche website developer and author. To learn more about Basic Investment Terms, please visit Smart Investing for current articles and discussions.
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